53. Penalty for failure to declare Tax Due

(1) Where any dealer has under declared tax, and where it has not been established that fraud or willful neglect has been committed and where under declared tax is:-

(i) less than ten percent of the tax, a penalty shall be imposed at ten percent of such under-declared tax.

(ii) more than ten percent of the tax due; a penalty shall be imposed at twenty five percent of such under-declared tax.

(2) Where any dealer, prior to the detection by any authority prescribed, voluntarily declares that tax due for a tax period is under declared and he pays the tax due along with interest, no penalty shall be imposed provided that such declaration is made within the time limit and in the manner prescribed.

(3) Any dealer who has under declared tax, and where it is established that fraud or willful neglect has been committed he shall be liable to pay penalty equal to the tax under declared; besides being liable for prosecution:

Provided that before levying penalty under this Section the authority prescribed shall give the dealer a reasonable opportunity of being heard.